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Vivendi has started testing the appetite of possible bidders for its video game business Activision Blizzard

Vivendi, the French media-to-telecoms conglomerate, has started testing the appetite of possible bidders for its video game business Activision Blizzard, five sources close the situation said on Friday.

The group, whose chief executive Jean-Bernard Levy stepped down last month, is anxious to prove that it is taking action to address concerns over its huge debt burden and flagging share price [ID:nL6E8HS8LO]. Ratings agency Standard & Poor’s placed it under negative credit watch on Wednesday because of the uncertainty over its future direction.

“It’s nothing official yet, but they’ve asked a bank to go and talk to possible buyers for Activision,” said a source close to the Vivendi board.

Activision Blizzard is the biggest U.S. video game publisher by market capitalization. Vivendi owns a 60 percent stake and a sale could help the French group to raise up to $10 billion, the sources said.

Although a formal process has not started, bankers close to Vivendi are sounding out cash-rich trade players, including China’s Tencent and U.S. duo Time Warner and Microsoft, as well as private-equity heavyweights KKR, Providence and Blackstone, banking sources said.

Microsoft and Time Warner declined to comment, while the other four were not immediately available to comment.

Vivendi came under fire after a badly timed acquisition of French mobile operator SFR at the beginning of the year, just before new low-cost entrant Free Mobile dented margins and market share, sending Vivendi’s share price below 13 euros ($16.10).

Affordable valuation

Since Levy’s departure the board has embarked on a strategic review that could result in sporadic disposals, a Rupert Murdoch-like split between the telecoms and entertainment businesses or a full break-up of the company.

In addition to Activision and SFR, the group’s businesses include French pay-TV company Canal Plus, music label Universal Music, Maroc Telecom and Brazil’s GVT.

Activision is not considered to be among the core businesses and is thought to be the easiest to offload. The company’s six times EBITDA valuation is viewed as affordable for the likes of Tencent, Time Warner and Microsoft, as well as the large private equity houses.

Tencent and Activision have already agreed to a partnership that allows the internet and wireless services provider to offer Activision’s popular Call of Duty title as a free-to-play online game in China. However, taking full ownership would remain a big step for Tencent because the two companies have different business models.

“They have two big franchises, Call of Duty on the console side and World of War Craft on the MMOG (massively multiplayer online game) side. And China is not a big market for console businesses; online games are much bigger for various reasons,” said a banker specializing in the sector.

Microsoft is another player with the necessary firepower, but it is likely to be focused on the next generation of its Xbox console. The source said: “They probably don’t want to distract themselves too much, but they are the ones who, if they want to stay in games, would think about owning some of these big franchises, not just providing the consoles.”

Vivendi declined to comment on Activision and its general disposal plans but said that “every option is on the table” and that the board would take its time.

Meh, Activision is probably the biggest whore gaming company out there. I like some of the titles the publish but even then they milk it for every last dime (ex. Assassin's Creed). Hopefully they remain independent of the big two (Microsoft and Sony) so that their games continue to be multiplatform.

Meh, Activision is probably the biggest whore gaming company out there. I like some of the titles the publish but even then they milk it for every last dime (ex. Assassin's Creed). Hopefully they remain independent of the big two (Microsoft and Sony) so that their games continue to be multiplatform.

not sony, microsoft are greedy for getting titles and even released the xbox early causing huge faults like the red rings of death. i'd rather there be more ps3 only title to balance things out as it's a fact ps3 is the better console if only for blu ray, ps3 only games have the potential to be better than xbox games period because of blu ray, but they never use it because the games are limited as they have to be made for both, so xbox is the limiting factor.

Meh, Activision is probably the biggest whore gaming company out there. I like some of the titles the publish but even then they milk it for every last dime (ex. Assassin's Creed). Hopefully they remain independent of the big two (Microsoft and Sony) so that their games continue to be multiplatform.

not sony, microsoft are greedy for getting titles and even released the xbox early causing huge faults like the red rings of death. i'd rather there be more ps3 only title to balance things out as it's a fact ps3 is the better console if only for blu ray, ps3 only games have the potential to be better than xbox games period because of blu ray, but they never use it because the games are limited as they have to be made for both, so xbox is the limiting factor.

Meh, they're both terrible. I am a fan of Sony products, but I'm on my third PS3. My first YLOD with a bad drive control board, my second's blu ray laser died, and fingers crossed my third one is holding up. But it's a joke, both companies have basically released crappy hardware without much concern for reliability or durability.

Similarly, the PS3's RAM difficulties are rather well known and frustrating considering how it has limited the console's ability to have features like skype or cross-game chat.

As far as games being "better" because of blu ray, I haven't seen it. I don't know of any games that have more or improved content because of the greater capacity. Sure, the 360 has the inconvenience of needing multiple discs in some cases, but developers aren't going to waste time making more meaningful content for a multiplatform title. If anything, given those parameters, the PS3's BRD is a disappointment considering the (usually) longer load times versus the 360. Considering most multiplats come to PC as well, which has no real limitations for developers, at best the BRD could be a filedump for uncompressed audio.

One of the main reasons why these modern consoles fail is the use of lead free solder. Lead free solder can't stand heat very well then it's get solid again and bridges with solder points right next too it. Which causes YLOD and RROD. Or it simply loses the connection with the motherbord/cpu because of this. It sucks they have to use this solder but they do because of the environment laws. Years ago none of this was an issue and lead solder was used everywhere.

I am pro-xbox, this thing always works for me. I have a playstation3 but i barely use it. And when i do i need to update it every time befor i can play. Sony really f*cked up when the console got hacked last year. Then they took away all kind of features from the firmware (like the other-os option). And they banned a lot of third party controllers, and you can't use a lot of usb drives anymore to backup data because of the same reason. And now... (this week) Sony just closes the game developer behind wipe out, and destruction derby... WHY?! RIP liverpool studios...

Microsoft is just adding features to the xbox in my opinion. Too bad you have to pay to play online but to be honest Xbox live works a lot better and easier then PSN.

One of the main reasons why these modern consoles fail is the use of lead free solder. Lead free solder can't stand heat very well then it's get solid again and bridges with solder points right next too it. Which causes YLOD and RROD. Or it simply loses the connection with the motherbord/cpu because of this. It sucks they have to use this solder but they do because of the environment laws. Years ago none of this was an issue and lead solder was used everywhere.

I am pro-xbox, this thing always works for me. I have a playstation3 but i barely use it. And when i do i need to update it every time befor i can play. Sony really f*cked up when the console got hacked last year. Then they took away all kind of features from the firmware (like the other-os option). And they banned a lot of third party controllers, and you can't use a lot of usb drives anymore to backup data because of the same reason. And now... (this week) Sony just closes the game developer behind wipe out, and destruction derby... WHY?! RIP liverpool studios...

Microsoft is just adding features to the xbox in my opinion. Too bad you have to pay to play online but to be honest Xbox live works a lot better and easier then PSN.

On lead solder: You can use the arctic silver but again, it comes down to the price these companies are going to charge for the end product. FWIW, none of my failures have been heat-related. They have all been faulty components/wear and tear (both were drive failures, albeit different types). To be fair though, lead is poisonous. I don't mind it, I fire lead rounds at the range often, but again, it is a health hazard. There are alternatives.

On the hacking: I don't blame Sony for getting hacked. I blame anonymous. The claim of altruism is a joke, and taking down PSN did not hurt anyone but anonymous as a considerable portion of the gaming community turned against them for such a haughty gesture. I do agree that if you want to jailbreak your console and whatnot, so be it. But what they did was wrong regardless. With regards to game companies closing...Sony has lost a ton of money over the past year or two. It's not entirely surprising, given the state of the global economy and the impact the tsunami had on Japan.

That being said, again, I agree that Sony's features removal was a bad decision. I'm very upset that they've removed backwards compatibility in favor of milking more money out of customers by putting the PS2 (and earlier) catalog on PSN. Granted, it's something like Nintendo's Wii shop, but the Wii still allows the previous-gen games to be played on the current console. It's inexcusable, and another reason why I am reconsidering Sony next-gen.

On PSN: I can't complain about PSN. I don't think you should have to pay to play online (unless it's an MMORPG and is thus inherent in the purchase), especially when the alternative is going to the PC which is arguably cheaper and a better version of most software. But outside of not having cross-game chat (which is a console limitation, not network related), I haven't seen anything that makes X-Box Live a superior alternative to PSN, and certainly nothing that would make me want to pay for the service. Also, I do prefer PSN's system of dedicated servers to the P2P connection style of X-Box Live.